Wednesday, March 24, 2010

Durable Goods Orders Increase for Third Month

WASHINGTON (MarketWatch) - "Demand for U.S.-made durable goods rose a seasonally adjusted 0.5% to $178.1 billion in February, the third straight increase in a key forward-looking indicator, according to Commerce Department data released today. New orders for machinery and civilian aircraft were strong in February, while new orders for autos, defense goods and electronics declined. The 0.5% increase in durable goods orders was weaker than the 1.7% gain expected by economists surveyed by MarketWatch. However, January's orders were revised higher, from a 2.6% gain to 3.9%. December's orders were also revised higher."

MP: New orders for durable manufactured goods in February reached the highest level ($178.1 billion) since November 2008 (see top chart above). The 12-month percentage change in February of 10.9% followed an 11.9% increase in January, which was the highest annual increase in new orders for durable goods and equipment from U.S. manufacturers since September 2006, more than three years ago (see bottom chart). The last time there were two consecutive double-digit monthly increases in durable goods orders was four years ago in the spring of 2006. Add this to the growing list of V-shaped signs of economic recovery, especially in the U.S. manufacturing sector.

16 Comments:

Is your chart in inflation adjusted dollars? Looking at the data, it shows that durable goods orders have fallen ~5% since 2000. If the data is not inflation adjusted, it would be much worse than that for real durable goods manufacturing.

I wasn't comparing the current data to the peak month; I was comparing the bulk of 2000 to current. The bulk of the data data from 2000 showed around $190B in monthly durable goods orders. Current month is around $178B.

Year over year comparisons are rather meaningless. They are percent changes from a very reduced level.

Reducing orders from 100 to 25 is a 75% decrease. In this case there was multiple large decreases for what looks like 5-6 quarters. So the 20% increases we see now are after a 20% decrease followed by more 20% increases.

The real money is just that, money. What $ level are durable goods orders now vs last year, vs 2007 (pre-crisis).

Glad to see that the decline in orders has stopped. But it is real easy to get a 20% increase from 10 orders (2 orders) vs a 20% increase on the old level of say 100 orders (20 additional orders).

That big parasite on the economy just keeps getting bigger. While growth is still going to happen, people are unfortunately going to be trumpeting the growth versus asking why it's not bigger.

Someone on CNBC World was talking about a LUV recovery. Some countries were in an L, some in a U, and some in a V. Can't recall which groupings he was thinking, but on a relative basis, it's hard to believe the US is going to be a V.